The Ninth Circuit Court of Appeals has revived a more than $1 billion insurance lawsuit against Kia and Hyundai, sending the case back to federal court in California on September 14. About 200 insurers claim the automakers’ Korean parent companies knowingly shipped vehicles without engine immobilizers through California ports.

The appeals court’s ruling addressed jurisdiction, not whether Kia or Hyundai are ultimately responsible for the theft-related losses. The case will return to U.S. District Judge James V. Selna in Orange County, where the insurers will have another opportunity to pursue their claims.

Why the case was reopened

A district court previously dismissed the lawsuit after finding it lacked jurisdiction over the Korean entities. The Ninth Circuit disagreed, concluding that the companies had sufficient connections to California because thousands of vehicle shipments were sent to and through the state’s ports.

The court’s decision means the insurers can continue trying to establish that Kia and Hyundai should reimburse them for claims connected to thefts of affected vehicles. It does not determine whether the automakers owe any money.

Vehicles covered by the lawsuit

The lawsuit involves Kia and Hyundai vehicles from model years 2011 through 2022. Kia began leaving engine immobilizers off many U.S.-market trims in 2011, while Hyundai followed in 2016. The anti-theft technology had already become standard across much of the industry.

The missing immobilizers became a major theft risk after videos showing how to steal the vehicles spread online around 2020. The resulting theft wave became widely known as the “Kia Boys” phenomenon. Los Angeles experienced roughly twice as many vehicle thefts in the summer of 2020 as it did during the summer of 2019.

A UCLA study cited in the case projects that theft rates for vulnerable Kia and Hyundai models could remain elevated through 2042. For insurers, that long-term exposure is central to the effort to recover money paid on theft claims from the manufacturers rather than absorbing the losses through premiums.

Earlier settlements do not resolve insurer claims

Kia and Hyundai have already reached settlements in related litigation. Those agreements include a $145 million settlement involving vehicle owners and a separate $9 million settlement with state attorneys general. Neither settlement resolves the insurers’ current claim for more than $1 billion.

A 2025 settlement connected to a 36-state class action also requires Kia and Hyundai to make engine immobilizer technology standard on future models. Owners of older vehicles may still qualify for Hyundai recall or software-update programs intended to reduce theft risk, but those measures do not decide the insurance lawsuit.

The case now returns to the trial court for further proceedings. The next phase will focus on whether the insurers can prove that the automakers’ decisions caused compensable losses across the affected vehicles and claims.